The world’s biggest unicorn companies have suffered an £8billion slump in value this year, with retailers seeing the biggest drops as households struggled with the cost-of-living crisis.
Research showed the total value of the top 100 unicorn firms – which are private companies with a valuation of at least $1billion (£800m) – dropped 1 per cent in the 12 months to September 2023. There was a 30 per cent increase in value in the previous year.
In Europe and the rest of the world, valuations tumbled £70billion, or 18 per cent, during 2023.
Fashion brand Shein, which is based in Singapore, was a big contributor to the drop with a £27billion reduction in value.
E-commerce was the worst performing industry in the top 100, with the total value declining 39 per cent in the year, reflecting the downturn in companies more exposed to consumer spending habits.
Slump: Research showed the total value of the top 100 unicorn firms dropped 1 per cent in the 12 months to September 2023
But American and Chinese firms in the list bucked the trend to report a 5 per cent increase in valuation, driven by significant jumps for Elon Musk’s SpaceX and TikTok-owner ByteDance. Most firms saw no change due to a subdued deals market, the analysis by professional services firm PwC showed.
The bankruptcy of Bahamas-based crypto exchange FTX saw two unicorns drop out of the list – FTX and FTX US. Meanwhile, the value of AI-related companies increased 43 per cent, or £110billion, driven by OpenAI storming into the top five with a £67billion price tag.